Despite external shocks, Indonesia has maintained creditworthiness through swift adjustment. Indonesia's flexible economic management and clear policy signals have lent stability to the economy, in contrast to the stop and go reforms, uncertainty, and constant debt renegotiations in many high...

The authors compare economic performance in the CFA (franc) zone with the economic performance in similar countries outside the CFA zone in recent years. The results of their model estimates indicate that the competitive position for CFA members was weaker in the second half of the 1980s than in...

India's trade policy regime has changed dramatically since July 1991. The objective of reform has been to improve export performance by improving export incentives and eliminating discretionary controls. Using a simple model, the author sets out to examine whether export incentives actually...

In the context of an empirical model, the authors examine the impact of capital flows, among other fundamentals, on long-term exchange rates in Chile. The real exchange rate and its fundamentals were found to be cointegrated during 1960-92. This cointegration allows a reinterpretation of...

As a result of Turkey's currency crisis in 1994, output fell 6 percent, inflation rose to three-digit levels, the Central Bank lost half of its reserves, and the exchange rate (against the US dollar) depreciated by more than half in the first three months of the year. The author presents...

The author provides a descriptive analysis of credit and monetary policies in Malaysia and investigates the distributional consequences of monetary policy there by focusing on small and medium-size industries and large manufacturing firms. The author suggests that"payoff"or"default"risk - as...

Central bank losses usually originate, the author explains, when a bank takes on other functions besides its normal role, such as subsidized loans to priority sectors, rescues of troubled financial institutions, or takeovers of private or public debt. This paper attempts to review the issues...

The growing adoption of an inflation targeting framework in emerging market economies has increased the importance of understanding inflation dynamics and forecasting its future path in these countries. The author considers the case of Turkey and investigates the performance of models that have...

Fiscal adjustment is an illusion when it lowers the budget deficit or public debt but leaves the government's net worth unchanged, says the author. Conventional measures of the budget deficit largely measure the change in explicit public sector liabilities (debt). A more appropriate measure of...

This paper evaluates Chile's stabilization policies since the early 1970s. Four episodes are examined: (a) the high inflation at the beginning of the military regime when inflation was close to 1000 percent per year; (b) the orthodox stabilization program of 1975; (c) the exchange rate-based...